2018 (4) TMI 1164 - HC - Central Excise

Court sets aside CESTAT's order, remits case for review. Pre-deposit orders to be evaluated on merits.

M/s. Teaserve Versus The Commissioner of Central Excise, Service Tax and Customs

The court set aside the CESTAT's final order and remitted the matter to the Tribunal for consideration on merits. The civil miscellaneous appeal was ... Maintainability of appeal - Non-compliance of pre-deposit - Whether in the facts and circumstances of the case, an order of the Commissioner (Appeals) dismissing an appeal for non-compliance of pre-deposit order is an appealable order in terms of Section 86 of the Finance Act, 1994? Held that: - Material on record discloses that the appeal preferred by the appellant was taken up for final disposal by CESTAT on 09.02.2017. On the said date, due to ill health of the appellant's counsel, who has his office in Coimbatore, he was incapable of appearing on the day of hearing and hence, the appellant was unable to advance their arguments before the CESTAT, and hence CESTAT passed an ex-parte order in Final Order No.40196/2017 dated 09.02.2017, wherein the appeal preferred by the appellant was dismissed as not maintainable on the ground that the first appellate authority had not considered the matter on merits. On the basis of instructions in C.No.I/10/12/2018-LG dated 27.03.2018, the department have instructed that the matter can be remitted back to the Tribunal. Matter is remitted to the Tribunal for consideration on merits. Issues Involved:1. Appealability of the Commissioner (Appeals) order dismissing an appeal for non-compliance with pre-deposit order under Section 86 of the Finance Act, 1994.2. Justification of CESTAT in dismissing the appeal as not maintainable without considering the correctness and legality of the Commissioner (Appeals) order.Issue-wise Detailed Analysis:1. Appealability of the Commissioner (Appeals) Order:The primary issue is whether the order of the Commissioner (Appeals) dismissing an appeal for non-compliance with a pre-deposit order is appealable under Section 86 of the Finance Act, 1994. The appellant argued that the CESTAT should have considered the correctness of the Commissioner (Appeals) order and remanded the matter for de novo consideration after passing an appropriate order regarding the pre-deposit. The court relied on the precedent set in Venus Rubbers vs. Addl. Commissioner of Central Excise, Coimbatore, where it was held that the Tribunal must consider the pre-deposit issue on merits and remand the matter to the Commissioner (Appeals) for reconsideration if the pre-deposit order was found erroneous.2. Justification of CESTAT's Dismissal of the Appeal:The second issue revolves around whether the CESTAT was justified in dismissing the appeal as not maintainable without evaluating the merits of the Commissioner (Appeals) order. The appellant contended that the CESTAT should have followed the mandate laid down in Venus Rubbers, where it was established that the Tribunal must assess the pre-deposit order's correctness and legality. The appellant also pointed out that the Commissioner (Appeals) did not consider relevant parameters such as prima facie case, balance of convenience, and irreparable loss while passing the pre-deposit order. Additionally, the appellant highlighted financial constraints and the non-profit nature of their institution, arguing that these factors should have been considered for waiving the pre-deposit.Court's Decision:The court noted that the CESTAT dismissed the appeal without considering the merits of the case, as the Commissioner (Appeals) had not addressed the matter substantively. The court emphasized the need for the Tribunal to evaluate the pre-deposit issue on merits, as established in the Venus Rubbers case. The court also acknowledged the department's suggestion to remit the matter to the Tribunal for a decision on merits, which would expedite the resolution.Conclusion:The court set aside the CESTAT's final order dated 09.02.2017 and remitted the matter to the Tribunal for consideration on merits. The civil miscellaneous appeal was allowed, and the connected civil miscellaneous petition was closed. This judgment underscores the importance of evaluating pre-deposit orders on their merits and ensuring that appeals are not dismissed without substantive consideration.